The Business Of Video Games: Streamers And Refereum [Infographic]

Last year I wrote a short series of articles about the video game industry. This year I am going to get things started with a similar series of articles. I am once again going to focus on the business side of the video game industry. Today’s article is about marketing and a new opportunity for people that live stream video games.

Game Marketing is a Rough Business

It is getting harder and harder for developers to effectively market their games. In 2017 ad spending was over 37 billion and on average it was costing developers about $15 a piece to gain new customers. Top level developers are spending as much as 30% of their total revenue on advertising alone. That can be a huge expense when you don’t even know if that advertising is going to be effective. Also, it’s important to note that these numbers keep going up year after year and the advertising market is getting oversaturated with game ads. Today's tech-savvy consumer is not being reached by conventional advertising and the customers they do reach are hard to track.

Streamers and Developers

If you are not familiar with streaming sights like Twitch, they are sites that allow people to stream live videos on the web. Anyone can sign up and start streaming just about anything they want. The largest category of this type of entertainment and possibly the largest audience in the world belongs to video game streamers. Games like DOTA 2 surpass 32 million viewers. Which makes them way more popular than Sunday night football at 20 million viewers. All of this viewing is something that video game companies have been trying to capitalize on. So far it seems that streamers are rarely compensated for their fanbase. There are a few streamers out there that are able to make a decent amount of money doing what they do, but that number is small when compared to the total number of streamers. For most people, it’s a labor of love.

In the past game developers have tried to incentivize and reward players for recommending their games but to my knowledge, these attempts have not worked very well. Not for the gamers, not for the developers, and not for the viewers.

A New Opportunity

In San Francisco, Dylan Jones has founded a new company called Refereum that is trying to change the way the system works. They want to directly reward Streamers for playing games and having people watch them.